Changes in the total asset turnover ratio may indicate changes in:
A) ﬁnancing decisions
B) Cost structure
C) Product proﬁtability
D) Sales

Question

Quizplus · Accepted Answer

The total asset turnover ratio measures a company's ability to generate sales from its assets. Therefore, changes in this ratio primarily indicate changes in sales, not directly in financing decisions, cost structure, or product profitability.

Changes in the Total Asset Turnover Ratio May Indicate Changes